Britton v. Lincare Inc

Filing 20

MEMORANDUM OPINION. Signed by Magistrate Judge Staci G Cornelius on 3/30/2015. (AVC)

FILED
2015 Mar-30 AM 11:55
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
WILLIE BRITTON, for the use and benefit of
the United States,
Plaintiff,
v.
LINCARE, INC.,
Defendant.

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Case No.: 2:13-cv-00742-SGC

MEMORANDUM OPINION1
This is a qui tam action brought by Willie Britton on behalf of the United States of
America against Lincare, Inc., pursuant to the False Claims Act, 31 U.S.C. §§ 3729 – 3733 (the
“FCA”). (Doc. 1). The action was unsealed after the United States declined to intervene. (Docs.
4 & 5). On November 20, 2013, Lincare filed a motion to dismiss the complaint pursuant to
Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim on which relief
may be granted. (Doc. 8). Britton has responded (Doc. 13), and the parties have orally argued
their positions (see Doc. 17 and docket entry dated March 11, 2015). For the reasons discussed
below, Lincare’s motion to dismiss is due to be granted, and this action is due to be dismissed
with prejudice.
I. Pleading Standard
A False Claims Act complaint must meet the heightened pleading standard set forth in
Rule 9(b) of the Federal Rules of Civil Procedure, meaning it must allege fraud with
particularity. U.S. ex rel. Clausen v. Lab. Corp. of America, Inc., 290 F.3d 1301, 1308-10 (11th
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In accordance with the provisions of 28 U.S.C. § 636(c) and Rule 72 of the Federal Rules of Civil Procedure, the
parties have voluntarily consented to the exercise of full dispositive jurisdiction by the undersigned magistrate
judge. (Doc. 19).

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Cir. 2002); Hopper v. Solvay Pharm., Inc., 588 F.3d 1318, 1324 (11th Cir. 2009). “A False
Claims Act complaint satisfies Rule 9(b) if it sets forth ‘ “facts as to time, place, and substance of
the defendant’s alleged fraud,” specifically “the details of the defendants’ allegedly fraudulent
acts, when they occurred, and who engaged in them.”’” Hopper, 588 F.3d at 1324 (quoting
Clausen, 290 F.3d at 1310). Failure to meet the pleading requirements of Rule 9(b) is grounds
for dismissal pursuant to Rule 12(b)(6) for failure to state a claim on which relief may be
granted. U.S., ex rel., Shurick v. Boeing Co., 330 Fed. App’x 781, 783 (11th Cir. 2009) (citing
Clausen, 290 F.3d at 1310; United States ex rel. Atkins v. McInteer, 470 F.3d 1350, 1357 (11th
Cir. 2006)). When considering a Rule 12(b)(6) motion, a court accepts the factual allegations of
the complaint as true and construes them in the light most favorable to the plaintiff. Chaparro v.
Carnival Corp., 693 F.3d 1333, 1335 (11th Cir. 2012). However, a court is not required to accept
a plaintiff’s legal conclusions unsupported by facts. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
The plaintiff’s factual allegations must support a claim for relief that is plausible on its face and
rises above mere speculation. Id.
II. Complaint
Lincare is an oxygen respiratory company. (Doc. 1 at ¶ 11). Britton is employed as a
service representative for Lincare. (Id. at ¶ 9). More specifically, Britton delivers nebulizers.
(Id. at ¶ 2). In his capacity as a Lincare service representative, Britton explains prescriptions and
demonstrates proper breathing techniques for use with a nebulizer, which are tasks Lincare’s
internal documents require to be performed by a clinician. (Id. at ¶¶ 2, 5, 12-13, 15, 17-18).
Lincare relies on its service representatives to perform patient education services because it has
many more clients in the Birmingham area than the single clinician it employees in that market
can serve. (Id. at ¶ 20). The complaint both alleges “[u]pon information and belief,” Lincare

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bills Medicare for the patient education services Britton performs, and “[t]o the extent” Lincare
bills Medicaid for patient education services, Britton performs those services. (Id. at ¶¶ 3-4, 16).
The complaint states a count under § 3729(a)(1), alleging Lincare knowingly presented or caused
to be presented false or fraudulent claims for payment by the United States. (Id. at ¶¶ 21-26).
The complaint also states a count under § 3729(a)(2), alleging Lincare knowingly made, used, or
caused to be made or used, false or fraudulent statements and certifications to get a false or
fraudulent claim paid by the United States. (Id. at ¶¶ 27-30).
III. Discussion
The FCA imposes civil liability on persons who defraud the government. A private
citizen, known as a “relator,” may commence an action, known as a “qui tam action,” on behalf
of the United States to enforce the provisions of the FCA. § 3730(b). Although the Fraud
Enforcement and Recovery Act of 2009, Pub. L. No. 111-21, 123 Stat. 1617 (“FERA”), amended
and renumbered sections of the FCA,2 the complaint in question specifically alleges violations of
§§ 3729(a)(1) and (a)(2), the pre-amendment versions of the FCA’s “presentment” and “makeor-use” provisions. (See Doc. 1 at Counts I & II). Counts I and II of the complaint parrot the
language of §§ 3729(a)(1) and (a)(2) (1994), respectively. (Compare Doc. 1 at 4-6, with §§
3729(a)(1) and (a)(2) (1994)). Furthermore, the parties have briefed the pending motion to
dismiss under the pre-amendment version of the FCA. (See Docs. 8 and 13). Accordingly, the
undersigned will address the sufficiency of Britton’s complaint under §§ 3729(a)(1) and (a)(2)
(1994).

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The amendments to the FCA took effect on May 20, 2009, the date of FERA’s enactment, and apply to conduct on
or after that date, except that amendment of § 3729(a)(2) took effect on June 7, 2008 and applies to all “claims”
pending on or after that date. Pub. L. No. 111-21, § 4(f), 123 Stat. at 1625. The Eleventh Circuit has interpreted the
word “claim” to mean “any request or demand . . . for money or property,” as defined by 31 U.S.C. § 3729(b)(2)(a)
(2009), rather than a case pending before a district court. Hopper, 588 F.3d at 1327 n.3.

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The pre-amendment version of the FCA’s “presentment” provision imposes civil liability
on any person who “knowingly presents, or causes to be presented, to an officer or employee of
the United States Government or a member of the Armed Forces of the United States a false or
fraudulent claim for payment or approval.” § 3729(a)(1) (1994). The pre-amendment version of
the FCA’s “make-or-use” provision imposes civil liability on any person who “knowingly
makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent
claim paid or approved by the Government.” § 3729(a)(2) (1994). Lincare argues Britton fails
to plead the presentment of a claim under § 3729(a)(1) or the payment of a claim under §
3729(a)(2) sufficiently. (Doc. 8 at 5-12). In the alternative, Lincare argues Britton fails to allege
the violation of any Medicare or Medicaid billing or supplier requirement. (Id. at 12-15). In
response to this alternative argument, Britton cites guidelines for billing Medicare published by
the American Academy of Respiratory Care and claims to proceed under an implied false
certification theory. (Doc. 13 at 2-4).3 Although there is some question whether Britton has
alleged a basis for the falsity or fraudulence of any claim for patient education services
performed by a Lincare service representative that was submitted for Medicare or Medicaid
reimbursement, the undersigned need not address this issue because, regardless, Britton has
failed to plead the other elements of his claims sufficiently.
A. § 3729(a)(1) Claim
The pre-amendment version of the FCA’s “presentment” provision requires the actual
submission of a false or fraudulent claim to the government. Clausen, 290 F.3d at 1311. Rule
9(b) “does not permit a False Claims Act plaintiff merely to describe a private scheme in detail
but then to allege simply and without any stated reason for his belief that claims requesting
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“[A]n implied certification theory . . . recognizes that the FCA is violated where compliance with a law, rule, or
regulation is a prerequisite to payment but a claim is made when a participant has engaged in a knowing violation.”
U.S. ex rel. Keeler v. Eisai, Inc., 568 Fed. App’x 783, 799 (11th Cir. 2014).

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illegal payments must have been submitted, were likely submitted or should have been submitted
to the Government.” Id. Rather, “some indicia of reliability must be given in the complaint to
support the allegation of an actual false claim for payment being made to the Government.” Id.
(emphasis in original).

Whether a complaint contains indicia of reliability to support the

allegation of an actual false or fraudulent claim that satisfies Rule 9(b) is determined on a caseby-case basis. Atkins, 470 F.3d at 1358. The Eleventh Circuit has recently synthesized case law
articulating the standard for pleading the actual submission of a false or fraudulent claim:
Providing exact billing data—name, date, amount, and services rendered—or
attaching a representative sample claim is one way a complaint can establish the
necessary indicia of reliability that a false claim was actually submitted.
However, there is no per se rule that an FCA complaint must provide exact billing
data or attach a representative sample claim. Under this Court’s nuanced, caseby-case approach, other means are available to present the required indicia of
reliability that a false claim was actually submitted. Although there are not bright
line rules, our case law has indicated that a relator with direct, first-hand
knowledge of the defendants’ submission of false claims gained through her
employment with the defendants may have a sufficient basis for asserting that the
defendants actually submitted false claims. By contrast, a plaintiff-relator without
first-hand knowledge of the defendants’ billing practices is unlikely to have a
sufficient basis for such an allegation. Additionally, a corporate outsider likely
does not have the required access to learn enough about the defendants’ billing
practices. At a minimum, a plaintiff-relator must explain the basis for her
assertion that fraudulent claims were actually submitted. It is not enough for the
plaintiff-relator to state baldly that he was aware of the defendants’ billing
practices, to base his knowledge on rumors, or to offer only conjecture about the
source of his knowledge.
U.S. ex rel. Mastej v. Health Mgmt. Assocs., Inc., 591 Fed. App’x 693, 704-05 (2014) (internal
citations omitted), petition for cert. docketed, No. 14-1154 (U.S. Mar. 23, 2015).
For example, in Mastej, the relator claimed a hospital operator and its subsidiary violated
the FCA by seeking Medicare reimbursement for patients referred to a medical center through
pay-for-referral schemes that violated federal statutes. Id. at 697. The operative complaint
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summarily stated the defendants submitted Medicare claims for patients referred through the
schemes without providing the date or amount of any claim submitted or paid or alleging the
frequency of claims. Id. at 706. Nonetheless, because the relator was a corporate insider with
“highly significant employment roles and duties” and alleged “he was not only in a position to
know but also gained access to the relevant information during his employment,” the Eleventh
Circuit held the operative complaint contained sufficient indicia of reliability to support the
relator’s allegation he had personal knowledge the defendants actually submitted Medicare
claims for patients referred through the schemes during the time he was employed by the
defendants. Id. at 708-09. However, the court held the complaint did not satisfy Rule 9(b) with
respect to the allegation the defendants sought and received Medicare reimbursement for patients
referred through the schemes even after the relator ended his employment with the defendants
because the relator was no longer privy to information about the defendants’ business and billing
practices or revenue from Medicare reimbursements, leaving only the generalized and
conclusory allegations regarding submission of claims. Id. at 709-10.
Similarly, in Hopper the Eleventh Circuit held the operative complaint failed to allege the
actual submission of a false or fraudulent claim sufficiently where it neither provided billing data
for alleged false claims nor alleged the relators had personal knowledge of the billing practices
of any person or entity who submitted false claims. 588 F.3d at 1326; see also Clausen, 290
F.3d at 1311-12 (operative complaint failed to plead actual submission of false or fraudulent
claim sufficiently where it did not provide copy of asingle bill or payment; identify any specific
claim submitted to government, amount of any charge, or actual date of any claim; describe
defendant’s billing practices even based on second-hand information; or otherwise support

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conclusory allegation defendant submitted false claims to government “on the ‘date of service or
within a few days thereafter’”).
Applying Rule 9(b) through the lens of Eleventh Circuit jurisprudence addressing
motions to dismiss qui tam actions for failure to state a claim on which relief may be granted, it
is clear Britton fails to plead the actual submission of a false or fraudulent claim sufficiently. He
does not provide a sample claim or any billing data. The complaint does not specify when any of
the conduct Britton vaguely describes occurred. Britton does not allege he ever worked in
Lincare’s billing department or otherwise has first-hand knowledge of Lincare’s billing practices
or the actual submission of a false or fraudulent claim.

In fact, Britton does not even

affirmatively allege Lincare actually submitted a false or fraudulent claim for Medicare or
Medicaid reimbursement. Rather, he alleges “[u]pon information and belief,” Lincare bills
Medicare for patient education services he performs, and “[t]o the extent” Lincare bills Medicaid
for patient education, he performs those services. (See Doc. 1 at ¶¶ 4, 16). These speculative,
conclusory allegations are plainly insufficient to state a claim against Lincare pursuant to §
3729(a)(1) (1994). See Corsello v. Lincare, Inc., 428 F.3d 1008, 1013-14 (11th Cir. 2005)
(relator’s allegations, “often based ‘on information and belief,’” lacked indicia of reliability
because they failed to provide underlying basis for relator’s assertions); Clausen, 290 F.3d at
1311 (allegations a false or fraudulent claim “must have been submitted, were likely submitted
or should have been submitted to the Government” fail to satisfy Rule 9(b)).
Britton argues that unlike the relator in Clausen, who worked for the defendant’s
competitor, he “was directly involved in the challenged practice: using the delivery personnel
such as himself to provide respiratory set up and education services.” (Doc. 13 at 5). However,
the relevant inquiry for purposes of determining whether a complaint has pled the actual

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submission of a claim sufficiently is whether the relator purports to have direct, first-hand
knowledge of the defendant’s billing practices. See Mastej, 591 Fed. App’x at 704 (citing U.S.
ex rel. Walker v. R & F Properties of Lake County, Inc., 433 F.3d 1349, 1360 (11th Cir. 2005);
Atkins, 470 F.3d at 1359). Britton, like the plaintiff in Clausen, does not. Britton also appears to
argue he has pled submission of an actual claim sufficiently because it would not make sense for
Lincare to perform patient education services but not bill Medicare or Medicaid for the provision
of such services. (Id. at 7-8). However, allegations that false claims “must have been submitted,
were likely submitted or should have been submitted” without more are insufficient to satisfy
Rule 9(b). Clausen, 290 F.3d at 1311; Mastej, 2014 WL 5471925, at 704, 709.
In sum, the complaint contains no indicia of reliability to support any allegation a false or
fraudulent claim was actually submitted for Medicare or Medicaid reimbursement and fails to
plead a § 3729(a)(1) claim that is more than merely speculative.
B. § 3729(a)(2) Claim
A relator need not prove the presentment of a claim to make out a violation under the preamendment version of the FCA’s “make-or-use” provision. Hopper, 588 F.3d at 1327. Rather, §
3729(a)(2) requires that (1) the defendant made a false record or statement for the purpose of
getting a false claim paid or approved by the government, and (2) the false record or statement
caused the government to actually pay a false or fraudulent claim.

Id.

That is, under §

3729(a)(2), a complaint must allege the government in fact paid a false claim. Id. at 1328-29.
Although Britton cursorily alleges Lincare made false statements or certifications, (Doc.
1 at ¶ 28), the complaint does not identify what these false statements or certifications were.
Furthermore, Britton does not allege any facts to support his cursory allegation Lincare made
these unidentified false statements or certifications for the purpose of getting a false or fraudulent

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claim allowed or paid by the United States. Finally, the complaint does not contain even a
cursory allegation the United States allowed or paid any claim submitted by Lincare, much less
any facts that would support an allegation the government in fact paid a false claim.
Although in Hopper the Eleventh Circuit contemplated the possibility that the pleading
standard for claims brought pursuant to § 3729(a)(2) is more relaxed than for claims brought
pursuant to § 3729(a)(1), Britton’s complaint fails to satisfy even the general pleading standard
embodied by Rule 8(a)(2) of the Federal Rules of Civil Procedure. “[L]abels and conclusions,”
“a formulaic recitation of the elements of a cause of action,” and “naked assertion[s] devoid of
further factual enhancement” are insufficient to satisfy that standard. Iqbal, 556 U.S. at 678. As
to Britton’s § 3729(a)(2) claim, all the complaint contains is a bare, conclusory recitation of the
elements. Therefore, he has failed to plead a plausible § 3729(a)(2) claim.
C. Amendment
“Ordinarily, a party must be given at least one opportunity to amend before the district
court dismisses the complaint.” Corsello, 429 F.3d at 1014. However, “ ‘[a] district court is not
required to grant a plaintiff leave to amend his complaint sua sponte when the plaintiff, who is
represented by counsel, never filed a motion to amend [] or requested leave to amend before the
district court.’” U.S. ex rel. Sanchez v. Lymphtax, Inc., 596 F.3d 1300, 1303 (11th Cir. 2010)
(quoting Wagner v. Daewoo Heavy Indus. Am. Corp., 314 F.3d 541, 542 (11th Cir. 2002)). In his
response to Lincare’s motion to dismiss, Britton notes he “is entitled to ‘one chance to amend the
complaint and bring it into compliance with the rule,’” (Doc. 13 at 2 n.1), and states the motion
to dismiss “is due to be denied or in the alternative he be given one opportunity to cure” (id. at
8). Whether these lone statements could be construed as requests to amend the complaint is
questionable.

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Even if they could, the request would be due to be denied. When moving to amend his
complaint, a plaintiff must either attach a copy of his proposed amended complaint to his motion
to amend or set forth the substance of his proposed amended complaint in the motion. Atkins,
470 F.3d at 1362 (citing Long v. Satz, 181 F.3d 1275 (11th Cir. 1999)). For example, in Atkins,
the relator requested leave to amend his complaint in the body of a memorandum filed in
opposition to the defendants’ motion to dismiss. 470 F.3d at 1361. Assuming the request was
the functional equivalent of a motion, the Eleventh Circuit affirmed the district court’s rejection
of the request on the grounds the relator failed to attach his proposed amended complaint to or
set forth the substance of his proposed amended complaint in his memorandum. Id. 1362.
Britton has not attached a copy of any proposed amended complaint to his response to Lincare’s
motion to dismiss or otherwise suggested how he would amend his complaint to comply with
Rule 9(b).

Notably, counsel for Britton did not even make an oral motion to amend the

complaint during the hearing on the pending motion to dismiss after counsel for Lincare called
attention to Britton’s failure to move to amend his complaint during the more than fifteen months
the motion to dismiss has been pending. Under these circumstances, Britton’s complaint is due
to be dismissed outright.
IV. Conclusion
For the foregoing reasons, Lincare’s motion to dismiss (Doc. 8) is due to be granted, and
this action is due to be dismissed with prejudice.
DONE this 30th day of March, 2015.

______________________________
STACI G. CORNELIUS
U.S. MAGISTRATE JUDGE
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